Nigerian Financial Authorities Unite to Simplify Bank Recapitalisation
The Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), and the Nigeria Deposit Insurance Corporation (NDIC) have announced a strategic partnership aimed at streamlining the bank recapitalisation process. This initiative is part of a wider effort to enhance efficiency and transparency within Nigeria’s financial sector.
In a statement released on Sunday, SEC Director General Emomotimi Agama highlighted the collaborative efforts as key to reducing the time required for capital-raising activities, thereby making the Nigerian capital market more attractive to both investors and issuers. “This partnership is designed to simplify the process of recapitalisation, ensuring that banks can raise the necessary funds more quickly and efficiently,” Agama stated.
To achieve these goals, several initiatives have been put in place, including the introduction of an electronic filing system, simplified registration procedures, and updated regulatory frameworks. These measures are expected to significantly increase market liquidity by allowing companies to access capital more readily.
Agama explained that the CBN, SEC, and NDIC are working closely to ensure a seamless capital-raising process for banks during the recapitalisation period, in accordance with the new framework issued by the SEC in June 2024. “The new framework provides clear guidelines and procedures for banks to follow when raising capital, ensuring a smooth and transparent process,” he said.
One of the central elements of this initiative is the implementation of an electronic offering platform, mandated by the new framework. This digital approach is designed to enhance the efficiency of the recapitalisation programme by providing a comprehensive solution for the offering, subscription, and payment processes. Agama noted that this system would help eliminate multiple identities, reduce the likelihood of unclaimed dividends, and accelerate the overall process, benefiting both companies and investors.
A joint team comprising representatives from the CBN, SEC, and NDIC has been established to oversee the recapitalisation programme, particularly in areas such as capital verification, which is essential for allotment clearance. This collaborative effort aims to ensure that the recapitalisation process is both efficient and secure.
Agama expressed satisfaction with the progress made so far, reiterating the SEC’s commitment to unlocking the full potential of the Nigerian capital market. He emphasised that the ongoing reforms align with the Renewed Hope Agenda of President Bola Ahmed Tinubu’s administration, which focuses on driving economic growth and development. “We are dedicated to ensuring that the capital market is well-positioned to contribute to Nigeria’s economic development,” Agama concluded. “Time to market will be a key focus, and we will continue to improve our processes to ensure swift approvals for issuances.”
This partnership between Nigeria’s leading financial authorities marks a significant step towards enhancing the efficiency and transparency of the nation’s financial sector, ultimately aiming to foster a more robust economic environment.
